Employee Retirement Benefits

12 Months Ended

Dec. 31, 2011

Employee Retirement Benefits [Abstract]

Employee Retirement Benefits

Note 10.   Employee Retirement Benefits

Employees who meet certain service requirements are covered under a defined contribution retirement savings plan, which includes IRS Section 401(k) provisions. We contribute up to 6% of the employee's eligible compensation, based on the employee's voluntary contribution. Our contributions and costs for the retirement savings plan were $1,581,000 in 2011, $1,538,000 in 2010 and $1,497,000 in 2009. These obligations are fully funded.

In addition to providing retirement savings benefits, we provide post-retirement health care and life insurance benefits for eligible employees. We are not currently funding these post-retirement benefits, but have accrued these liabilities. New employees hired on or after January 1, 2007 are not eligible for post-retirement health care and life insurance benefits. Based on valuation assumptions at December 31, 2011, post-retirement benefits expected to be paid for the next five years and thereafter are as follows: 2012- $429,000; 2013 - $509,000; 2014 - $622,000; 2015 - $627,000; 2016 - $658,000 and thereafter - $3,773,000.

We are required to recognize the funded status of our post-retirement benefit plans on the consolidated balance sheet and recognize as a component of accumulated other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise during the period, but are not recognized as components of net periodic benefit cost.

The following table summarizes the balance sheet impact, including the benefit obligations and assets associated with our post-retirement benefit plans as of December 31, 2011 and 2010, respectively.

(Dollars in thousands)	2011			2010
Change in benefit obligation
Benefit obligation at beginning of year	$	14,971		$	13,270
Service cost		509			452
Interest cost		799			723
Amendments		(216	)		-
Actuarial loss		1,632			844
Benefits paid		(369	)		(318	)
Benefit obligation at end of year	$	17,326		$	14,971

	As of December 31
(Dollars in thousands)	2011			2010			2009
Components of net periodic benefit cost
Service cost	$	509		$	452		$	309
Interest cost		799			723			547
Expected return on plan assets		-			-			-
Amortization of transition obligation		60			60			60
Amortization of prior service cost		(55	)		(55	)		(55	)
Recognized net actuarial loss		429			391			134
Net periodic benefit cost	$	1,742		$	1,571		$	995
Discount rate used to determine benefit obligation As of December 31:		4.4	%		5.4	%		5.5	%

In 2012, we expect to recognize approximately $60,000 of the transition obligation, ($76,000) of the prior service credit and $540,000 of the net actuarial loss as a component of total period post-retirement benefit expense.

Health Care Trend Rates for the Year Ending December 31, 2011	Year	Trend Rate
	2012-2013	6.2%
	2013-2014	6.1%
	2014-2015	5.9%
	2015-2016	5.8%
	2016-2017	5.8%
	2017-2018	5.8%
	2018-2019	5.8%
	2019-2020	5.8%
	2020-2080	5.8%-4.7%
	2081	4.7%

(Dollars in thousands)
Effect of 1% Increase and 1% Decrease in Trend Rate	1% Increase			1% Decrease
Accumulated post-retirement benefit obligation as of December 31, 2011
Dollar	$	2,991		$	(2,388	)
Percentage change in retiree medical costs		17.3	%		(13.8	%)
Service cost and interest cost for fiscal 2011
Dollar	$	278		$	(218	)
Percentage change in retiree medical costs		20.5	%		(16.0	%)

The fair value of our pension plans were determined based on level 3 inputs. Our methodology for measuring the accumulated post-retirement benefit obligation is based on guidance published by the Society of Actuaries. Health care rates trend downward in the calculations in smaller increments over a longer period of time. The health care cost trend rate used in determining the accumulated post-retirement benefit obligations was 6.2% in 2012 and decreases gradually until it reaches 5.8% in 2015 and ultimately 4.7% in 2081. These initial trend rate assumptions were provided based on a study of the ten-year history of our self-funded medical benefits plan. A one-percentage point increase in the health care inflation rate for each year would increase the accumulated post-retirement benefit obligation by $2,991,000. A one-percentage point decrease in the health care inflation rate for each year would decrease the accumulated post-retirement benefit obligation by $2,388,000.

We are required to recognize a current federal subsidy that we may receive for providing prescription drug coverage to retirees. Substantial portions of the prescription drug benefits provided under our post-retirement benefit plan are deemed actuarially equivalent to the benefits provided under Medicare Part D. As of December 31, 2011 and 2010, the reduction in the accumulated post-retirement benefit obligation due to the subsidy was $2,833,000 and $1,921,000, respectively.